Do you believe in love at first sight — like the instant head-over-heels connection between Cinderella and Prince Charming in the 1950 Disney movie Cinderella? Or do you believe in a slower falling-in-love process — like the growing connection between Rapunzel and Flynn in the 2010 Disney movie Tangled? And if you believe in either of these, then do you think it’s possible to hate at first sight or to “fall in hate”?
Dropping brands into one of these four cells (i.e., love at first sight, falling in love, hate at first sight, falling in hate) helps to reveal enduring truths about what payers are looking for from brands, and provides marketers with actionable guidance.
Love at first sight
Let’s begin with some brands payers loved at first sight. Spiriva Respimat was preferred from the get-go despite its cost because it more effectively reduced COPD-related exacerbations and exacerbations leading to hospitalizations. Smells like value! Payers love a good value and are willing to pay a premium to realize medical-cost offsets. As an aside, real-world evidence (RWE) — what payers really, really want — proved the clinical trials correct.
Entresto was another brand some prescient payers loved right out of the gate because in clinical trials it reduced the risk of cardiovascular death and hospitalization for patients with heart failure. These payers loved the trial data and predicted guideline support would likely follow. Even though the annual cost is several thousand dollars higher than generics that cost less than a dollar day, these payers viewed it as a good value.
The takeaway from these examples: To payers, love at first sight is all about value, not cost — cheap date not required. Addressing an unmet need is sweet, and reducing medical costs, especially hospitalization, is so very attractive.
Falling in love
Payers can learn to love brands. And if payers are students, then RWE is the teacher. Jardiance is a good example.
A placebo-controlled clinical trial demonstrated Jardiance’s ability to reduce the risk of cardiovascular death in adult patients who had type 2 diabetes and established cardiovascular disease. It stood to reason that fewer cardiovascular deaths might also reduce the risk of hospitalizations and costs — but that was just conjecture. Then RWE demonstrated that, compared with DPP-4 inhibitors, Jardiance reduced the risk of hospitalization for heart failure in people with type 2 diabetes with cardiovascular disease and — bonus! — without cardiovascular disease. Confident in its ability to yield savings, the manufacturer offered payers a value-based contract to reduce the total (medical and drug) cost of care for people with diabetes and cardiovascular disease. Payers said “yes.”
Returning to Entresto, some payers were not willing to commit to a long-term relationship based on clinical trial data. Wary of a potentially fatal attraction, they wanted RWE of cost offsets. The manufacturer was so sure it was love actually, it offered a pre-nup of sorts — value-based contracting — which won commitments from payers. In time, it proved to be a match made in heaven. Entresto reduced all-cause hospitalizations and all-cause medical and outpatient pharmacy costs, and guideline support followed.
So, what’s love got to do with it? Clinical trials are like promises a brand might not be able to keep. Real-world evidence can make payers’ hearts grow fonder if the data are compelling. And when you couple this with strong guideline support and an attractive value-based contract, the payers put a ring on it.
Hate at first sight
Love and hate are dualities. So, if there are brands payers love, then there must be brands payers hate. Well, that’s the case, and there are many examples to choose from.
For illustrative purposes, let’s focus on a product with lots of baggage. Exondys 51 (eteplirsen) is a weight-based product for Duchenne muscular dystrophy (DMD) that weighs on payers with an annual cost of $300,000 to $1 million per year. The high cost would probably not be a problem if it were commensurate with value, but the clinical trial data were weak and based on a surrogate endpoint, and the FDA approval process was not without controversy. In the end, the FDA label counseled that “a clinical benefit of Exondys 51 has not been established. Continued approval for this indication may be contingent upon verification of a clinical benefit in confirmatory trials.” Not much of a blessing!
More recently, ICER’s assessment of the clinical effectiveness and value of treatments for DMD said: “No price can be suggested as a fair value-based price for eteplirsen or golodirsen because no persuasive evidence yet exists to demonstrate the clinical effectiveness of either drug.” Ouch! With a high cost and no established clinical benefit, it is no wonder several of the largest payers consider it investigational and do not cover it — and several others cover it but apply prior-authorization criteria that are more restrictive than the FDA label.
Payers instantly hate products that do not add value, like me-too products, or those they perceive as patent-extension efforts, such as product reformulations. And payers won’t even go out on a first date with products they perceive as being not medically necessary.
Falling in hate
Some manufacturers take an “all’s-fair-in-love-and-war” approach to marketing their products, and it catches up with them. To payers, large and/or rapid price increases suck the value from a product. Payers considered the price increases of EpiPen, Daraprim, and Seromycin egregious. Worse is a product with egregious price increases and little to no evidence of superiority over lower-cost products. And worse yet is when this kind of product is aggressively marketed. Acthar Gel is a product that payers never loved, but learned to hate for these very reasons.
So, how to lose a payer? Increase the price the way they used to vote in Chicago: early and often. And how to win them back? Significantly lower the price and strengthen the evidence of clinical effectiveness. That comeback strategy is working for the PCSK9s Praluent and Repatha.
Controlling emotions
With a little creative license, this fast-slow/love-hate quadrant analysis helps to predict payers’ perceptions of products as well as their market access decisions. Marketers who are surprised by payers’ predictable perceptions and behaviors either do not get payers or are blinded by love for their own brands.
A word to the wise marketer: Even if payers do not love your brand, avoid actions that will make them hate your brand — or you will pay for it in the form of restrictions and exclusions.
To the brands payers love at first sight or learn to love, remember that such love is ephemeral. Payers will leave you when a lower-cost substitute or product with superior value becomes available. That’s the tyranny of innovation. Until then, love it while it lasts.
No Comments